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(Bloomberg) — Sempra is launching a process to sell some natural gas assets just weeks after shares plunged on a lower profit outlook. 

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The moves to sell a Mexican fuel distributor and a stake in a liquefied natural gas business are part of the California company’s push to streamline and focus on US utilities, according to a statement Monday.

Sempra’s stock suffered a record 26% one-day crash on Feb. 25 after the energy provider cut its full-year earnings forecast, citing a decision by California regulators to limit a rate hike. 

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Jefferies analysts questioned whether an activist investor will emerge, noting the 2018 campaign by Elliott Management Corp. and Bluescape Resources Co. to advocate portfolio changes. 

“Most investors we speak to are negative on the company but are optimistic on activism option value,” the Jefferies analysts wrote in a note early Monday. 

Sempra rose as much as 1.1% in New York on Monday. The stock is trading at a discount of more than 20% to the broader utility index, on a price-to-earnings basis. 

Meanwhile, Guggenheim analysts said the proposed asset sales could lift profits and raise funds for investment in Sempra’s Texas utility business.

Sempra Chief Executive Officer Jeff Martin flagged the potential for asset sales during the company’s February earnings call. The company expects to close the transactions within 12 to 18 months. 

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The Mexican gas distributor, Ecogas Mexico, serves more than 600,000 homes and businesses in the Mexicali, Chihuahua and La Laguna-Durango regions. It holds three utility franchises and has more than 5,000 kilometers (3,100 miles) of pipelines.

Sempra created Sempra Infrastructure Partners in 2021 through the consolidation of its liquefied natural gas business and Mexican IEnova unit. It sold a 20% stake in the business to KKR & Co. for $3.37 billion in 2021 and 10% stake to the Abu Dhabi Investment Authority for about $1.8 billion in 2022.

(An AI summary previously at the top of the story was removed for misstating when Sempra’s stock crashed.)

—With assistance from Ruth Liao.

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